Airgate PCS Sues Sprint Over Nextel Merger

Airgate, which operates the largest all-digital CDMA 3G wireless network in the U.S., claims that the merger would breach exclusivity covenants it has in place with Sprint.

InformationWeek Staff, Contributor

August 8, 2005

1 Min Read

MANHASSET, N.Y. — Alamosa Holdings Inc. has announced that its subsidiary AirGate PCS Inc. has filed suit in the Delaware Court charging that the pending merger between telecom companies Sprint Corp. and Nextel Communications Inc. would breach contract agreements it has with Sprint.

Alamosa (Lubbock, Texas) is the largest PCS affiliate of Sprint, which operates the largest all-digital CDMA 3G wireless network in the U.S. Alamosa operates AirGate PCS primarily in the central and western portions of the U.S.

In the suit, AirGate charges Sprint with breaching exclusivity convenants between the two companies, and charges Nextel with unlawfully interfering with its rights under the contractual agreements. The suit seeks an injunction to block the merger, a judgement declaring the rights, remedies, and obligations of the parties under the agreements, and damages.

The Federal Communications Commission approved the acquisition of Nextel by Sprint on Aug. 3, creating what would be the third largest supplier of wireless services in the U.S. The licenses cover slots in the 800- and 900-MHz bands, the 1.9-GHz band and radio services licenses in the 2.1- and 2.5-GHz bands.

"Neither Sprint nor Nextel should be allowed to breach previous agreements in pursuit of their goals," stated David Sharbutt, chairman and chief executive of Alamosa, in a statement. "Sprint agreed that AirGate and Alamosa would be the exclusive providers of wireless services in their territories and that they would be entitled to specific performance of their agreements with Sprint, and we expect Sprint to fulfill its contractual commitments to AirGate and Alamosa."

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